Canada’s steel and aluminum industry leaders are urging the federal government to impose tariffs on China, aligning with the United States and Mexico to protect North America’s trading space from Chinese overcapacity.
“We can’t be the only CUSMA country that is not taking this serious action—for many reasons, but not the least of which [is that] we'll become the dumping ground for this excess steel capacity without those checks and balances at the border,” Catherine Cobden, president and CEO of the Canadian Steel Producers Association, said during a press conference on Aug. 8. CUSMA refers to the Canada-United States-Mexico trade agreement.
The federal government has recently concluded a public consultation to gather feedback on imposing tariffs on Chinese electric vehicles. The government has accused Beijing of unfair trade practices, including a “state-directed policy of overcapacity” that harms Canadian manufacturers. Finance Minister Chrystia Freeland has hinted at expanding these potential tariffs beyond the EV sector.
More than 200 representative groups shared their opinions during the public consultation, according to Jean Simard, president and CEO of the Aluminum Association of Canada. He highlighted the massive volume of state-sponsored Chinese aluminum entering Canada, stating: “This is a clear and present danger. What hurts our partner hurts us. We cannot and will not let this happen. It’s not in our industry’s interests and not in Canada’s interests.”
‘A Hole in the CUSMA Fortress’
In a joint statement, the industries asked the Canadian government to impose a 25 percent tariff on all melted and poured steel from China. For aluminum, they want Canada to match U.S. taxes on Chinese aluminum products. The CEOs also urged the government to act quickly in reviewing the feedback and align with the U.S. measures.“In an ideal world, [the government] would work in lockstep with the U.S. government’s announcement and implementation so that we don’t open up a hole in the CUSMA fortress that will enable Chinese imports to come in,” Simard said.
In May, the United States announced tariffs on 387 Chinese products, including 289 categories related to steel and aluminum. The tariff rates for these products will increase to 25 percent this year.
The steel producers association previously warned that about 750,000 tons of Chinese steel are sold in the United States each year. With the new U.S. tariffs, this volume is expected to redirect to other markets with less protection. They also pointed out that, despite Canada’s current trade measures, China is still the third-largest steel exporter to Canada.
Cobden reiterated this concern on Aug. 8, noting that despite existing tariffs on Chinese steel, imports from China have doubled in recent years.
